And in a note Thursday, UBS equity strategist Julian Emanuel
revised his 2016 S&P 500 year-end target down to 2,175
from 2,275.

His target had been among the
most bullish on Wall Street at the end of last year.

But a lot has worsened since then, as he explained:

"The 'known unknowns' intensified in January – China equity
market and FX instability, a renewed oil price plunge,
questions as to whether the Fed made a policy error
by hiking in December as US economic data has surprised to
the downside. These have translated into softer CEO
confidence (even as consumers remain resolute),
sparking talk of an imminent US recession - a likelihood
which UBS continues to believe is small in 2016.

When combined with the unprecedented uncertainty of US politics,
market volatility has justifiably risen and is likely to
remain elevated into the fall elections."

Emanuel noted that, already, volatility — measured by the
Chicago Board Options Exchange's Volatility Index (VIX) — in
2016 is trending higher than the average going back to at least
2011.

And if any of the headwinds —particularly from China's economy —
get worse, there's the risk that the S&P 500 could fall to as
low as 1,750, or 8% below current levels, in the next few weeks,
according to Emanuel.

On Thursday, the S&P 500 opened at 1,902.65.

He wrote, "And yet amid record individual investor caution, signs
of stabilizing macro have begun to emerge, notably a "mindful
Fed" catalyzing a weaker US Dollar. In this regard, "things going
right" beyond expectations could result in upside volatility.

Harris cut his target in light of last week's
fourth-quarter GDP numbers, which showed economic growth
slowed late last year. Harris is also forecasting that weaker oil
prices, reduced capital spending, and the strong dollar would
keep growth lukewarm.

All this would weigh on corporate earnings, according to
Emanuel, who cut his S&P 500 earnings-per-share target
to $119 from $126, still implying a 1.4% increase from
2015.

And, there won't be another earnings recession this year because
the drop in oil prices and the rise in the dollar would not be as
pronounced as it was in 2015, he wrote.